It’s nearly the end of the month and the cat needs her shots, the fuel gauge is on empty and clothing stores are starting to call ! Sound familiar?
It’s time to budget. In South Africa the international recession has finally hit and it has hit hard. Most households have found the fuel increases have been especially tough to deal with and the resultant rise in food prices have taken their toll on the family income.
If you’ve created a budget, you know exactly how much money you have coming in, and how much is going out. If you haven’t sat down to do this, now is the time. I used to have a drawer where I shoved all the bills and took out one a week or whenever I had some money ! This is not a budget.. this is a dangerous no- win lottery system : )
Setting up a budget can be a tough and frustrating task as prices and costs change all the time. There are different drains on our purses every month and it’s particularly difficult to anticipate unexpected expenses. However, the budget will enable you to have insight into just how much you can spend or save. The key factor here is once the budget has been created, it’s necessary to stick to it or you will have wasted a lot of time and effort.
It has been proven that making a budget somehow seems to improve the financial stress. However it has other advantages as it will take the stress out of a marriage if it is plagued by unreasonable spending by one partner or lack of concern about cutting back or saving for that special holiday. If you are in some sort of partnership and pooling your expenses and money, it’s vital you both work on a way to make things fair and equal.
If you have enough money to meet your needs each month, you are indeed in a good place and you should save. Saving is good from two points of view. If you have savings and you hit a difficult patch or something untoward come up, you will not need to borrow money which has a high interest rate and get yourself in a credit situation which is expensive. It also means you can work towards something you have always wanted.. a nice holiday in Spain or a new cell phone. This will give your savings a positive purpose and this always makes it easier to put away those pennies.
Use cash to make your purchases. Holding a wad of actual money in your hands is such a turn off! It makes it a reality and not as simple as a swipe through the pay-point. What most analysts recommend is drawing enough cash for the week and thus saving in constant bank charges. Once this cash is spent for that week … well the entertainment is over and you know exactly how much you have paid out. So often the credit card bill reveals a whole lot of “forgotten” retail therapy.
Want to quit a bad habit then have a jar where you pay for your sins, every time you have a smoke or a drink? In order to calculate how much you spend on your habits, put in the amount you would pay each week on those indulgences and see the jar start filling up.
Paying off debt is always a tough one as there is no return or tangible relief in doing so. However, it has to be done so choose the card with the highest interest rate and pay that off first.. then cut it up !
One clever suggestion for learning about your spending habits is to save your receipts, and write down the places you spend money. You’ll be less likely to overspend if you realize how much money has actually gone through your hands. A friend of mine has a pin board in her kitchen and puts up all the slips to show her family how much she spends on their food, their clothing and the domestic products. It is a great idea to get the people around you involved in your budgeting and saving project.
Decide where you can cut costs and discuss this with your house mates or family. If there is wastage, it needs to be a communal effort and you cannot go around switching off lights everyone else leaves on !
Keep perspective and remember life is unpredictable. You should allow for some fun spending and some entertainment if possible. Keep adjusting it and forgive yourself if once in a while you cannot resist those red suede boots. Living in a material world is not easy but the rewards after a concerted saving will make you really appreciate your purchases a whole lot more.
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